Rebalancing Act

The White House announced a strategy over the weekend to coordinate the dollar’s exchange rate with other nations in global currency markets.

“This requires a shift in growth strategies by countries that have traditionally run large trade and current account surpluses, away from export dependence and toward stronger domestic demand led growth,” the Treasury Secretary said on Saturday, at a meeting of the Group of Twenty (G20) finance ministers in South Korea.  “Countries with significantly undervalued exchange rates committed to move towards more market-determined exchange-rate systems that reflect economic fundamentals.”

But with Obama’s failure to lead the international community toward a simpler objective, like convincing Iran to end its nuclear weapons program, it’s highly doubtful that his spectacle of fiat money, from competing economies, perfectly balanced in a world of speculators will ever approach reality.

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